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Measure risk-adjusted returns with precision. Make smarter investment decisions with our professional-grade Sharpe ratio calculator.
Sharpe Ratio Calculator
Upload your fund's historical NAV data and get instant Sharpe ratio analysis
Understanding the Sharpe Ratio
The Sharpe ratio measures the performance of an investment compared to a risk-free asset, after adjusting for its risk.
How It's Calculated
Sharpe Ratio = (Rp - Rf) / σp
Rp = Return of portfolio
Rf = Risk-free rate
σp = Standard deviation of portfolio
This formula helps investors understand whether a portfolio's returns are due to smart investment decisions or excessive risk. A higher Sharpe ratio indicates better risk-adjusted performance.
Risk-Adjusted Returns
Compare investments fairly by accounting for the risk taken to achieve returns.
Portfolio Optimization
Identify funds that provide the best return per unit of risk taken.
Investment Decisions
Make data-driven choices about which funds deserve your capital.
Frequently Asked Questions
Everything you need to know about the Sharpe ratio and our calculator.
The Sharpe ratio uses the risk-free rate as the baseline return. Typically, this is the yield on government treasury bills or bonds (like 3-month or 10-year Treasury rates). Our tool automatically uses the up to date Secured Overnight Financing Rate (SOFR).
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